Unions achieve a higher wage differential the more _____ and the more ______?
Correct answer: A. inelastic the demand for labour, they can restrict the supply of labour
- A. inelastic the demand for labour, they can restrict the supply of labour
- B. members they have, aggressive they behave
- C. the economy is growing, people prefer leisure
- D. the productivity is growing vacancies exist
Explanation
A union can raise wages more successfully when employers cannot easily reduce labour demand and when the union can restrict the supply of labour. These conditions make both sides of the labour market less responsive to the higher wage.
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